New Releases from Australia, Part 1

By now the Australian wine industry’s problems have been well documented. Exchange rate fluctuations affect all areas of any economy, but as so much of the wine that Australia has been exporting to the U.S. is dirt-cheap, even the modest increase in prices here as a result of the stronger Australian dollar has significantly affected sales that are dependent on penny-pinching consumers. Australia’s reliance and emphasis on the low end of the market is also giving its wines an undeservedly dicey image among many American collectors who are often motivated more by prestige than by actual quality when it comes to buying bottles. With a few notable exceptions the best Australian wines are largely ignored by American collectors, who tend to shun most New World wines anyway.

Anecdotal evidence also suggests that many American winos who drove the high-end Aussie (mostly Barossa) market earlier this decade have simply grown tired of the over-the-top, high-alcohol, massively oaky style that defined that era in the U.S. market. And to be fair, many of those fruit, alcohol and oak bombs from the late 1990s and early 2000s have performed miserably with age. But rather than explore the breadth of styles offered by Australia (which is virtually unmatched in the New World), many consumers simply dismiss the category of Australian wine out of hand and move on to the next hot region, style or over-hyped vintage.

Two thousand seven wasn’t the vintage that the already reeling Australian wine industry needed, except for the fact that the tragically low yields across the country did not further increase the country’s overflowing inventory of unsold wine. Overall, yields were the lowest in 30 years, thanks to the full range of seasonal problems: brushfires, drought, extreme heat, frost, and maybe even some locusts. The crop in Coonawarra was off by 75% due to the frost, while brushfires in Victoria caused widespread smoke taint, resulting in many grapes being discarded. Across South Australia the fruit set was light and the grapes and bunches were small, resulting in low yields. But in the best cases the wines benefitted from the subsequent increase in concentration.

In Barossa and McLaren Vale, yields were down significantly (by around a third, on average) and much of the fruit was so overripe that it had to be pulled out before it ever got to the sorter. Meanwhile, almost 2,000 miles to the west, in the Margaret River region, conditions were warm but nowhere near the levels of South Australia or Victoria, and frost is generally not a problem in this breezy, ocean-influenced area. Both white and red grapes came in riper than normal but not far above the norm, yielding wines that will be fleshy and rich, with immediate appeal. In sum, the 2007 growing season has yielded some excellent wines but this is a vintage to choose from carefully, as it does not offer the consistency delivered by the previous three years across Australia.

Incidentally, the dramatic slowdown in sales of Australian wine in the U.S. means that many wines specifically crafted for American importers may no longer generate sufficient sales for the importer to continue purchasing grapes or finished wines to make these blends. I have heard several stories of growers or producers who had relied heavily on sales to négociants or American importers being left high and dry as their customers cut back or simply stopped buying. The bright side to this situation is that some excellent sources for high-quality grapes have opened up, and a few of the braver importers or négociant operations have jumped on them.

By all accounts we are enjoying a buyer’s market for Australian wine right now, and great deals abound. Many wines from the generally excellent 2004, 2005 and 2006 vintages are being offered at ridiculously low prices considering the quality delivered. That’s good for the short term but it’s also potentially bad news for the medium and longer term if importers and wholesalers back away from Australia or simply close up shop. Most of those great deals floating around are the result of inventory liquidation or an importer simply going belly up, and fire-sale prices do no good for the image of high-quality Australian wine. If Australian wine is perceived as cheap or concocted (think of the dreaded critter wines), the best producers risk being tarred with same brush by the marketplace in spite of their hard work, low yields and world-class winemaking. A rising tide lift all ships but the opposite applies too.